INTRODUCTION

India is the second biggest rice producing country in the world after China. It contributes about 20 percent of the world output of rice. Paddy being the major cereal crop of India covers an area of more than 42.8 million hectares, the largest under any single crop (FAO, 1995). It has been stated by the Department of Agriculture, Government of India that in 1985-86 production of paddy was of the order of 96 million tonnes which was increased to 115 million tonnes in 1995-96 and is expected to increase to 130 million tonnes by year 2000. It is grown in almost all the provinces of the country but more than 86 percent of the total production accounts for the States of Andhra Pradesh, West Bengal, Tamil Nadu, Uttar Pradesh, Bihar, Orissa, Madhya Pradesh, Punjab and Assam. Rice production, processing and marketing constitute the biggest industry in the country. Indian rice milling industry is the oldest and largest agro-based industry. The annual production of paddy was estimated at over 521 million tonnes, mostly in developing countries and the amount is rising at an average rate of 3 percent per annum (FAO, 1995). It was, however, the serious food crisis in the early sixties which highlighted the need for a proper policy towards the industry. This led to joint study of the industry by the Government of India and the Ford Foundation of India. The study pointed out that the overall supply of rice could be augmented substantially with additional yield obtained through modernization of the existing rice processing techniques. A number of studies were also undertaken and came out with the same findings. As a result, the policy of modernization of rice mills in India has since then been pursued by the Government of India and various States within it.